TIDMBDI
RNS Number : 9417M
Bond International Software PLC
19 October 2016
Not for release, publication or distribution, in whole or in
part, in, into or from any jurisdiction where to do so would
constitute a violation of the relevant laws of such
jurisdiction.
For Immediate Release 19 October 2016
Recommended Final Increased Cash Offer
For
Bond International Software plc ("Bond" or the "Company")
By
Constellation Software UK HoldCo Ltd ("Constellation UK")
Recommendation by the Bond Directors of the Final Increased
Offer for the entire issued and to be issued ordinary share capital
of Bond International Software plc not already owned by
Constellation UK and parties acting in concert with Constellation
UK
Introduction
The Bond Directors, together with its advisers, have considered
the terms of the final increased cash offer of 121 pence per Bond
Share to be made by Constellation UK ("Final Increased Offer"). The
Bond Directors consider the greater certainty in timing and the
amount of cash distribution to better promote the interest of the
Bond Shareholders as a whole than a distribution to Bond
Shareholders via a members' voluntary liquidation of Bond,
following completion of the Sale.
The Bond Directors have taken into consideration that
Constellation UK has confirmed that it attaches great importance to
the skills, expertise and knowledge of the employees of Bond and
its subsidiaries, and expects them to continue to play a
significant role in developing the business, as well as
Constellation UK's intentions for Bond as set out in the Final
Increased Offer Document.
The Bond Directors, so advised by financial adviser, Houlihan
Lokey Capital, Inc. ("Houlihan Lokey"), as to the financial terms
of the Final Increased Offer, consider the terms of the Final
Increased Offer to be fair and reasonable and accordingly the Bond
Directors recommend unanimously that Bond Shareholders accept the
Final Increased Offer. In providing advice to the Bond Directors,
Houlihan Lokey has taken into account the commercial assessments of
the Bond Directors. Houlihan Lokey is providing independent
financial advice for the purposes of Rule 3 of the City Code to the
Bond Directors. The Bond Directors have therefore withdrawn their
recommendation to vote in favour of the Sale.
Bond will be writing to Bond Shareholders with its formal
response to the Final Increased Offer.
Background
On 30 June 2016, Constellation UK announced the terms of a cash
offer of 105p per Bond Share for the entire issued and to be issued
share capital of Bond not already owned by it or by persons acting
in concert with it (the "Original Offer"). The Original Offer was
made without the recommendation of the Bond Directors.
On 12 September 2016, Bond announced that it had entered into a
conditional agreement with funds managed by Symphony Technology
Group, LLC ("STG") pursuant to which Bond had conditionally agreed
to sell the entire issued share capital of the Recruitment Software
Subsidiaries to STG (the "Sale") for a total cash consideration of
GBP17.25 million, subject to adjustment for net debt and net
working capital (on a cash free debt free basis) to be calculated
through a completion accounts process. This adjustment was expected
to increase the cash payable to Bond on completion of such Sale to
GBP18.4 million.
On 23 September 2016, Bond and Constellation UK jointly
announced the Revised Offer at 115.5 pence per Bond Share which, at
that time, was recommended by the Bond Directors. The Revised Offer
was posted to Bond Shareholders on 3 October 2016.
On 28 September 2016, the Company announced that the original
general meeting convened for 28 September 2016 would be adjourned
to 5 October 2016.
On 5 October 2016, the Company announced that it had entered
into a Deed of Amendment with STG in relation to the Sale Agreement
pursuant to which STG improved the terms and agreed to pay a total
consideration of GBP19.4 million thereby increasing the cash
payable on completion to GBP20.65 million. STG also agreed to
purchase the Courtlands Property for GBP1.8 million payable in cash
on completion. The principal terms of the Deed of Amendment were
summarised in the Company's circular to the Bond Shareholders dated
5 October 2016, which also contained a Notice convening a New
General Meeting for 24 October 2016 to approve the revised terms of
the Sale, (the "Amended Sale Resolution"). The Independent
Directors recommended that the Bond Shareholders vote in favour of
the Amended Sale Resolution, as the total anticipated distribution
to the Bond Shareholders from a members' voluntary liquidation of
the Company following the sale represented a premium to the Revised
Offer of 115.5p per Bond Share.
On 11 October 2016, Constellation UK announced the terms of the
Final Increased Offer of 121 pence per Bond Share to be made by
Constellation UK for the entire issued and to be issued ordinary
share capital of Bond not already owned by Constellation UK or
parties acting in concert with Constellation UK (the "Final
Increased Offer"). The Final Increased Offer Document was posted to
Bond Shareholders on 12 October 2016. The Final Increased Offer
represents a premium of 15.2 per cent. of the Original Offer price
of 105 pence and values the existing ordinary share capital of Bond
at approximately GBP51.2 million.
The Bond Directors have now agreed to recommend Constellation
UK's Final Increased Offer.
Summary key terms of the Final Increased Offer
Under the terms of the Final Increased Offer, Bond Shareholders
will be entitled to receive:
For each Bond Share: 121pence in cash
The Final Increased Offer represents a premium of 38.3 per cent.
to the Closing Price of 87.5p per Bond Share on 2 June 2016, being
the last Business Day prior to the commencement of the Offer
Period.
The maximum amount of cash payable pursuant to the Final
Increased Offer will be approximately GBP35.9 million (based on the
existing issued ordinary share capital of Bond and assuming the
exercise of all outstanding options with an exercise price of less
than 121p per Bond Share under the Bond Employee Share Schemes and
the acceptance of the Final Increased Offer by all Bond
Shareholders before the Final Increased Offer closes). An
additional payment of approximately GBP1.1 million will be paid to
Mark Leonard in return for his Bond Shares to be transferred to
Constellation UK in order to satisfy the Acceptance Condition under
Rule 10 of the City Code.
The Bond Shares to which the Final Increased Offer relates will
be acquired by Constellation UK fully paid, or credited as fully
paid, and free from all liens, charges, equitable interests,
encumbrances, rights of pre-emption and any other third party
rights or interests of any nature whatsoever and together with all
rights now and hereafter attaching to them, including, without
limitation, the right to receive in full and retain all dividends
and other distributions, (if any) declared, made or paid in respect
of the Bond Shares on or after 17 August 2016.
The Final Increased Offer is subject to the conditions and
certain further terms set out in the Final Increased Offer Document
and, in the case of Bond Shares held in Certificated Form, in the
Form of Acceptance. The Final Increased Offer can only become
effective if all conditions to the Final Increased Offer have been
satisfied or waived (to the extent permissible).
Constellation UK announced on 11 October 2016 that,
Constellation UK and parties acting in concert with Constellation
UK either owned, or have received valid acceptances in respect of a
total of 18,198,638 Bond Shares (as at 10 October 2016), based on
the issued share capital of the Bond, as at 18 October 2016, this
represents approximately 43.0 per cent of Bond's existing issued
ordinary share capital. Further, on 17 October 2016, a further
231,609 Bond Shares were allotted to parties acting in concert with
Constellation UK, following the conversion of 231,609 Non-Voting
Convertible Shares into Bond Shares.
As Constellation UK and parties acting in concert with
Constellation UK own 100 per cent. of the Bond Non-Voting
Convertible Shares outstanding in Bond, the Panel has waived the
requirement under Rule 14 of the City Code to make a comparable
offer for these securities. Accordingly the Bond Non-Voting
Convertible Shares shall not be taken into account for the purposes
of the acceptance condition in Rule 10 of the City Code.
Background to and reasons for the recommendation
The Bond Directors consider the greater certainty in timing and
amount of the cash distribution of 121 pence per Bond Share
provided by the Final Increased Offer to better promote the
interests of the Bond Shareholders as a whole than a distribution
to Bond Shareholders via a members' voluntary liquidation of Bond,
following completion of the Sale. After the payment of all relevant
transaction costs and taxes, the Bond Directors estimate the
proceeds of a members' voluntary liquidation would to be between
121 pence and 122.5 pence per Bond Share which includes the sale
proceeds of the Courtlands Property which now forms part of the
Sale. This is based on the assumptions set out in the circular to
Bond Shareholders published by Bond on 5 October 2016.The Bond
Directors agree that if any of their assumptions in relation to the
final distribution are incorrect this could have a material impact
upon the timing and/ or the amount of cash distributed to the Bond
Shareholders, whereas the Final Increased Offer represents a
certain payment of 121p per Bond Share, stated by Constellation UK
to be payable by the earliest, 11 November 2016.
The Bond Directors have taken into consideration that
Constellation UK has confirmed that it attaches great importance to
the skills, expertise and knowledge of the employees of Bond and
its subsidiaries, and expects them to continue to play a
significant role in developing the business, as well as
Constellation UK's intentions for Bond as set out in the Final
Increased Offer Document.
Recommendation
The Bond Directors, so advised by financial adviser, Houlihan
Lokey Capital, Inc. ("Houlihan Lokey"), as to the financial terms
of the Final Increased Offer, consider the terms of the Final
Increased Offer to be fair and reasonable and accordingly the Bond
Directors recommend unanimously that Bond Shareholders accept the
Final Increased Offer. In providing advice to the Bond Directors,
Houlihan Lokey has taken into account the commercial assessments of
the Bond Directors. Houlihan Lokey is providing independent
financial advice for the purposes of Rule 3 of the City Code to the
Bond Directors. The Bond Directors have therefore withdrawn their
recommendation to vote in favour of the Sale.
As explained below, the Bond Directors are obliged under the
irrevocable undertakings that they have given to Bond to vote in
favour of the Amended Sale Resolution to authorise the Sale of the
Recruitment Software Subsidiaries to STG. If the Amended Sale
Resolution is not passed, or the Sale otherwise lapses or
terminates, the Bond Directors (and, where applicable, their wives)
intend to accept the Revised Offer in respect of the 6,831,631 Bond
Shares in which they are interested, representing approximately
15.94 per cent. of the issued share capital of Bond (as at 18
October 2016).
New General Meeting in connection with the Sale
On 5 October 2016 the Company announced that the original
General Meeting would be adjourned indefinitely due to the fact
that the resolution to be proposed at that meeting was to approve
the original terms of the sale agreed with STG which had been
replaced by the Amended Sale Resolution.
On 5 October 2016, Bond gave notice convening a general meeting
of the Bond Shareholders (the "New General Meeting"), to be held on
24 October 2016, at which (inter alia) the Amended Sale Resolution
will be proposed.
The Bond Directors gave irrevocable undertakings to Bond (on a
several basis) that they and their wives (where applicable) would
vote in favour of the Amended Sale Resolution in respect of a total
holding of 6,751,631 Bond Shares representing approximately 15.94
per cent. of the issued share capital of Bond (as at 18 October
2016). The irrevocable undertakings given by the Bond Directors
terminate if the Sale lapses or is terminated, or if the Amended
Sale Resolution is not passed at the New General Meeting or any
adjournment thereof, or if the Revised Offer or any further revised
offer from Constellation UK is declared unconditional as to
acceptances. These irrevocable undertakings did not lapse as a
result of the Revised Offer or the Final Increased Offer.
Constellation UK has announced that the total number of Bond
Shares that parties acting in concert with Constellation UK have
submitted proxies to vote against, the Amended Sale Resolution
represent approximately 29.99 per cent. of the voting rights
exercisable at the New General Meeting.
Bond Shareholders should note the following important
information in respect of the Sale and the New General Meeting:
-- the New General Meeting at which the Amended Sale Resolution
will be proposed will be held at 11.30 a.m. on 24 October 2016 at
the offices of Memery Crystal LLP at 44 Southampton Buildings,
London, WC2A 1AP. The Amended Sale Resolution is an ordinary
resolution which would be passed by a simple majority of those Bond
Shareholders voting in person or by proxy;
-- the Bond Directors are still obliged under the terms of the
irrevocable undertakings that they have given to procure that they
and their wives (where applicable) will vote in favour of the
Amended Sale Resolution in respect of in aggregate the 6,751,631
Bond Shares in which they are interested, which represents
approximately 15.94per cent. of the issued share capital of Bond
(as at 18 October 2016);
-- as explained above, the Bond Directors now unanimously
recommend that Bond Shareholders accept the Final Increased Offer,
as they (and their wives, where applicable) intend to do in respect
of their holdings of Bond Shares if the Amended Sale Resolution is
not passed or the Sale otherwise lapses or is terminated.
-- the Final Increased Offer is conditional upon no member of
the Bond Group having either (i) entered into an unconditional
binding commitment, or (ii) entered into a binding conditional
contract in respect of which all conditions have been fulfilled
which, when aggregated together with any and all other binding
commitments entered into by the members of the Bond Group, would,
upon completion of such commitments, result in the disposal by the
Bond Group of all or substantially all of the assets of the
Recruitment Software Division (whether by way of asset sale, share
sale or otherwise As indicated in the Final Increased Offer
document, if the Amended Sale Resolution is passed, the Final
Increased Offer will lapse.
In accordance with the terms of the conditional agreement
entered into between Bond and STG in respect of the Sale, following
termination of the Sale Agreement (as amended by the Deed of
Amendment), Bond shall pay STG a contribution to their reasonable
costs and expenses subject to a cap of GBP350,000.
Bond Directors and Employees
It is intended that Stephen Russell, Richard Hall and Martin
Baldwin will agree to resign upon the Final Increased Offer
becoming or being declared wholly unconditional, subject to their
terms of engagement. Bruce Morrison and Tim Richards shall remain
with the Bond Group under the ownership of Constellation UK and
subject to their existing terms of engagement.
The Bond Directors are pleased to note the statements made by
Constellation UK in its Final Increased Offer Document that it
attaches great importance to the skills, expertise and knowledge of
the employees of Bond and its subsidiaries, and expects them to
continue to play a significant role in developing the business.
The Bond Directors are also pleased to note that Constellation
UK intends to honour the existing employment and pension rights of
Bond's employees in accordance with applicable law and has no
intention of making any changes to Bond's ongoing employer pension
contribution obligations for existing employees and members of
Bond's pension schemes, the accrual of benefits for existing
members of Bond's pension schemes or the admission of new members
to Bond's pension schemes. The Bond Directors welcome Constellation
UK's confirmations that it has no immediate plans to change the
locations of Bond's places of business or to redeploy the fixed
assets of Bond in any material way.
However the Bond Directors have been told that if the Final
Increased Offer is declared unconditional in all respects
Constellation UK will conduct a review of the strategy and
operations of Bond and consider how best to integrate Bond into the
CSI Group. Until such a review occurs Constellation UK cannot be
certain what the impact will be on the employment of the management
and employees of Bond and its subsidiaries, including with respect
to their continued employment and relating to any material change
in the conditions of their employment, although Constellation UK
have said that it may result in some reduction of the headcount and
rationalisation of locations.
Action to Be Taken
Acceptances received from Bond Shareholders for the Original
Offer shall count as valid acceptances towards the Final Increased
Offer. Accordingly, such Bond Shareholders should take no further
action and if the Final Increased Offer becomes or is declared
unconditional in all respects such Bond Shareholders will receive
the increased cash consideration of 121 pence per Bond Share.
Further information on how to accept the Final Increased Offer
is set out in the Final Increased Offer Document, which is
available via Constellation's financial advisers, Herax Partners',
website at www.heraxpartners.com.
Definitions
Terms defined in the Circular (which was published on 12
September 2016) have the same meaning in this announcement. A copy
of the Circular can also be viewed on the Company's website.
For further information, please contact:
Bond International Software plc: Tel: 01903 707070
www.bondinternationalsoftware.com
Steve Russell: Group Chief Executive
Bruce Morrison: Group Finance Director
Buchanan: Tel: 020 7466 5000
Richard Darby
Steph Watson
Houlihan Lokey Capital, Inc. (Financial adviser)
Thomas Bailey Tel: 001 404 495 7056
Cenkos Securities plc (Nomad) Tel: 020 7397 8900
Stephen Keys
Camilla Hume
Disclaimer
This announcement is for information purposes only. It is not
intended to, and does not, constitute or form part of any offer,
invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, any
securities whether pursuant to this announcement or otherwise.
Houlihan Lokey Capital, Inc. ("Houlihan Lokey") is acting as
financial adviser exclusively for Bond and no-one else in
connection with the matters referred to in this announcement and
will not be responsible to anyone other than Bond for providing the
protections afforded to clients of Houlihan Lokey, nor for
providing advice in relation to the Offer, the Revised Offer or the
Final Increased Offer or any matter referred to in this
announcement. Neither Houlihan Lokey or any of its subsidiaries,
branches or affiliates, owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in
contract, in tort, under statute or otherwise) to any person who is
not a client of Houlihan Lokey in connection with the matters
referred to in this announcement.
Houlihan Lokey has given and not withdrawn its written consent
to the issue of this announcement with the inclusion herein of the
reference to its name in the form and context in which it
appears.
The statements contained in this announcement are not to be
construed as legal, business, financial or tax advice.
This announcement has been prepared for the purpose of complying
with English law, the City Code and the AIM Rules, and information
disclosed may not be the same as that which would have been
disclosed if this announcement had been prepared in accordance with
the laws of jurisdictions outside of England and Wales.
The statements contained in this announcement are made as at the
date of this announcement, unless some other time is specified in
relation to them, and service of this announcement shall not give
rise to any implication that there has been no change in the facts
set out in this announcement since such date. No dealer,
salesperson or other person is authorised to give any information
or to make any representations with respect to the Offer, the
Revised Offer of the Final Increased Offer other than such
information or representations contained in this announcement and,
if given or made, such information or representations must not be
relied upon as having been authorised by Bond.
Overseas Shareholders
The release, publication or distribution of this announcement
in, or into, jurisdictions other than the United Kingdom may be
restricted by laws and/or regulations of those jurisdictions.
Therefore any persons who are subject to the laws and regulations
of any jurisdiction other than the United Kingdom should inform
themselves about and observe any applicable requirements in their
jurisdiction. Any failure to comply with the applicable
requirements may constitute a violation of the laws and/or
regulations of any such jurisdiction. In particular, copies of this
announcement are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in
or into or from any Restricted Jurisdiction and persons receiving
such documents (including custodians, nominees and trustees) must
not mail or otherwise forward, distribute or send it in or into or
from any Restricted Jurisdiction.
Forward-looking statements
This announcement, including the information included in this
announcement, contains certain forward-looking statements. The
forward-looking statements contained herein include statements
about the expected effects of the Final Increased Offer on the Bond
Group, strategic options, the expected timing and scope of the
Final Increased Offer, and all other statements in this
announcement other than historical facts. These statements are
based on the current expectations and are naturally subject to
uncertainty and changes in circumstances. Forward-looking
statements often use words such as "anticipate", "target",
"expect", "estimate", "intend", "plan", "budget", "schedule",
"forecast", "project", "goal", "believe", "hope", "aims",
"continue", "will", "may", "should", "would", "could", "subject
to", or other words of similar meaning. By their nature,
forward-looking statements involve known and unknown risks and
uncertainties, because they relate to events and depend on
circumstances that will occur in the future. There are a number of
factors that could cause actual results, outcomes and developments
to differ materially from those expressed in, or implied by, such
forward-looking statements and such statements are therefore
qualified in their entirety by the risks and uncertainties
surrounding these future expectations. Many of these risks and
uncertainties relate to factors that are beyond the entities'
ability to control or estimate precisely, such as, but not limited
to, general business and market conditions both globally and
locally, political, economic and regulatory forces, industry trends
and competition, future exchange and interest rates, changes in
government and regulation including in relation to health and
safety, the environment, labour relations and tax rates and future
business combinations or dispositions. Although it is believed that
the expectations reflected in such forward-looking statements are
reasonable, Bond cannot give any assurance, representation or
guarantee that such expectations will prove to have been correct
and such forward-looking statements should be construed in light of
such factors and you are therefore cautioned not to place reliance
on these forward-looking statements which speak only as at the date
of this announcement. Bond does not assume any obligation to update
or correct the information contained in this announcement (whether
as a result of new information, future events or otherwise), except
as required by applicable law or regulation.
No Profit Forecasts
No statement in this announcement is intended as a profit
forecast or estimate for any period and no statement in this
announcement should be interpreted to mean that earnings or
earnings per share for Bond for the current or future financial
years would necessarily match or exceed the historical published
earnings or earnings per share for Bond.
Disclosure requirements of the City Code
Under Rule 8.3(a) of the City Code, any person who is interested
in 1 per cent. or more of any class of relevant securities of an
offeree company or of any securities exchange offeror (being any
offeror other than an offeror in respect of which it has been
announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement
of the Offer Period and, if later, following the announcement in
which any securities exchange offeror is first identified.
An Opening Position Disclosure must contain details of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) Bond and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30pm (London time) on the 10th Business Day following the
commencement of the Offer Period and, if appropriate, by no later
than 3.30pm (London time) on the 10th Business Day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
Bond or of a securities exchange offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the City Code, any person who is, or
becomes, interested in 1 per cent. or more of any class of relevant
securities of Bond or of any securities exchange offeror must make
a Dealing Disclosure if the person deals in any relevant securities
of Bond or of any securities exchange offeror. A Dealing Disclosure
must contain details of the dealing concerned and of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) Bond and (ii) any securities
exchange offeror, save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30pm (London time) on the Business Day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3 of the City Code.
Opening Position Disclosures must also be made by Bond and by
any offeror and Dealing Disclosures must also be made by Bond, by
any offeror and by any persons acting in concert with any of them
(see Rules 8.1, 8.2 and 8.4 of the City Code).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
Offer Period commenced and when any offeror was first
identified.
Publication on Website
A copy of this announcement and the Circular are and will be
available free of charge, subject to certain restrictions relating
to persons in any jurisdiction where release, publication or
distribution of this announcement would constitute a violation of
the securities law of such jurisdiction, for inspection on Bond's
website at www.bondinternationalsoftware.com/investor-info/ while
the Final Increased Offer remains open for acceptance.
Bond Share Capital
References to the existing issued share capital of Bond are
references to Bond Shares in issue on 18 October 2016 (being the
last practicable Business Day prior to the release of this
announcement) being 42,358,403 Bond Shares.
This information is provided by RNS
The company news service from the London Stock Exchange
END
OFFZMMMGLLNGVZG
(END) Dow Jones Newswires
October 19, 2016 05:29 ET (09:29 GMT)
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